TAXES ON PAYROLL, REVENUES AND PROFITS IN THREE MODELS OF COLLECTIVE BARGAINING

Variations in company taxes are analysed for a right‐to‐manage model, an efficient bargaining setting and a seniority approach. Taxes cannot be shifted forward by the risk‐neutral firm. Alternative income and bargaining power are allowed to vary with taxes. Employing asymmetric Nash solution it is found that changes in a payroll, revenue or profit tax can have differing implications for labour demand curve models and efficient bargaining solutions. This distinction might provide a novel basis for empirical work. Variations in bargaining power and‐within a labour demand curve setting‐the union's objective function do not change results.